GOP governors must confront health care mandates

Republican governors are scrambling to figure out what to do about the health-care law, now that President Barack Obama has won reelection and implementation of the Affordable Care Act is about to kick in at warp speed.

At least a half-dozen Republican governors had vowed not to go forward with the health-care law until after the Nov. 6. “I will make that decision number one after the election,” Alabama Gov. Robert Bentley told a local television station in September.

New Jersey Gov. Chris Christie said in late October, “I’ll make decisions when I have to.”

Decision Day is upon them. States face a Nov. 16 deadline to inform Health and Human Services whether they will create a health insurance exchange, the new online insurance marketplaces. Under the law, state exchanges will have to open their doors and allow residents to begin purchasing plans in October 2013.

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“The folks who need to restrategize at this point are going to be the Republican governors, for the most part,” said Cheryl Smith, a director at Leavitt Partners, the health consulting firm founded by former Health and Human Services Secretary Michael Leavitt. “They can’t just say no anymore. They have to accept that the Supreme Court ruling was what it was, and that the status quo is not sustainable.”

On the exchanges, states have three choices: They can run their own, using federal funds to set up the technology to allow consumers to compare and purchase health plans; they can leave the task to the federal government, or they can do enter into a “partnership” that allows state and federal governments to divvy up the responsibilities.

Two governors quickly made up their minds after the election: Virgina Gov. Bob McDonnell and Kansas Gov. Sam Brownback both announced Thursday they would not build exchanges, instead leaving the task to the federal government.

“I don’t want to buy a pig-in-a-poke for the taxpayers of Virginia,” McDonnell told the Richmond Times-Dispatch on Thursday. “At this point, without further information, the only logical decision for us is to use the federal option.”

In Kansas, the Republican-led insurance department lobbied for the state to build a partnership exchange, splitting the responsibilities with the federal government. It had prepared an application that the state could quickly submit to the federal government.

“We’ve been working on it and have it ready to go,” said Linda Sheppard, health division director for the Kansas Insurance Department.

Sheppard saw internal e-mail lists, made up of state health officials across the country, “light up” early Wednesday morning as regulators wondered what would happen next in their states.

“A number of states are trying to get themselves situated so that they can do a partnership exchange,” she says.

Gov. Brownback rejected the application late Thursday.

“My administration will not partner with the federal government to create a state-federal partnership insurance exchange because we will not benefit from it and implementing it could cost Kansas taxpayers millions of dollars,” he said in a statement.

Some states are already on track to run their own health insurance marketplaces. That includes Mississippi, which has long committed to running its own exchange. Phone calls started coming into Mississippi insurance commissioner Mike Cheney’s office hours after Obama’s reelection, asking for advice on how to best proceed.

“I talked with several other commissioners the day after the election,” he said. “I’ve told all of them that we’re very willing to share everything we’ve done. I would say I understand the dilemma faced by my other colleagues.”

Cheney will submit Mississippi’s plan to run a health insurance exchange to Washington as soon as Monday.

In states that have been among the most adamantly opposed to the health-care law, private industries are looking to make a push for further cooperation with the federal government. That includes Florida, where Gov. Rick Scott has repeatedly refused Affordable Care Act funds.

“We’re going to be lobbying on the issue,” said Patrick Geraghty, chairman and CEO of Florida Blue, the nonprofit insurance carrier. “I certainly don’t think it’s a dead issue in the state.”

Geraghty would like to see Florida run its own health insurance exchange. Local regulation of the insurance industry, he argues, would be more responsive to Floridians’ needs.

While Florida could potentially start with a federal exchange, and then transition into a state-run marketplace, he believes that effort would be messy and complex.

“I’m hopeful that in Florida, cooler heads will prevail and allow us to have some time to talk about this,” Geraghty said. “Anybody who has moved large scale systems knows that’s a really big lift. It’s really in the best interest for Florida to do this.”

Republican-led states are working on a tight timeline: After the Nov. 16 deadline, they face another checkpoint on Jan. 1, 2013. At that point, they have to demonstrate that their marketplace is on track to begin enrolling people in one year.

“If I were a governor, I’d be less concerned about the November deadline,” Leavitt’s Smith said. “I would be focused on the actual deadline, in January, to show you can make this work.”

In some states, the deadlines already seem too daunting to meet. Pennsylvania insurance commissioner Michael Consedine doubts that his state will be able to set up an exchange by next year.

Some of that, he says, has to do with a lack of clarity in the regulations released by the Obama administration. “The real obstacle is the timeline,” he said. “Our worst fear is that we would rush to build something and have the federal government come back and tell us, that’s not quite right.”